Lithuania

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The corporate tax rate is 15%. Since January 1st, 2006 a temporary social tax also applies. It rate is 3% in 2007, yielding an effective tax rate of 18% in 2007.
Small companies with annual income not exceeding LTL 500,000 and an average number of employees not exceeding 10 for the tax year are imposed on a corporate tax rate of 13%.
A company has the right to apply the corporate tax of 0% to a sum of 25,000 litas and a rate of 15% for the benefit left only if it has less than 10 employees and an income of 1 million litas (289,620 EUR) maximum.

   
Tax rate on long-term capital gains Capital gains are included in taxable profits and are subject to the corporate tax.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends, received and paid by Lithuanian entities, as well as other income received as a result of profit distribution, are subject to taxation at a rate of 15%.
Dividends paid by a foreign or a Lithuanian entity to a foreign entity wherein the foreign entity that receives dividends continuously (for at least 12 past months, including the moment of distribution of dividends) owns more than 10% of voting shares (interest) are not subject to taxation.
   
Tax rate on branches Branches are taxed for the corporate tax as any other companies.




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate Individual income tax is charged at a flat rate of 30% until July 2007. From July 1st, 2007 to December 31st, 2007 the rates shall be 15% and 27%. Then they shall be 15% and 24% from January 1st, 2008.
A reduced 15% tax rate applies to certain types of income, including income from distributed profits, rent or sale of property, creative activities and other individual activities.
   



VAT rates

Standard rates 18%
   
Reduced rates A 9% rate applies to the construction and renovation and heater system of buildings financed from the State and some municipalities' budget.
A 5% rate applies to passenger and luggage transport, books and newspapers, pharmaceuticals, hotel accommodation and certain foodstuffs.
A 0% rate applies to the export of goods and some related services, international transport, supplies of ships and aircraft, and certain cases of international trade or supplies to other EU member states.
Are exempted of VAT: items include education, healthcare, insurance and financial services; the leasing of dwellings and other immovable property; the sale or transfer of immovable property; and social, cultural, sports, radio and television services if supplied by non-profit-seeking entities.



Other important taxes


Name of tax
Rate
Road tax  
0.1% to 0.5%  
Land tax  
0.3% to 1%  


 



Useful links
Lithuanian Development Agency
Ministry of Finance
Lithuanian Customs

Last modified in January 2007
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